Scaling an Electronics Business

Five years ago, I met the the three owners of an Electronics Business. Above all, these owners wanted to increase the scale of their business. Since that time, the owners of this business have tripled their revenues, and are on track to triple them again over the next three years. Their profit and cashflow have more than tripled. They have paid off their bank debt, and are now investing in new cutting plant, new IT capability, and growing the talent of their teams. I have the privilege of continuing to work with these owners as they continue to expand their business.

How have they managed this impressive scaling feat, and where to from here?And just as importantly, what difference have these changes made for all the people in the business, owners and employees alike, during and outside of work hours? First things first:They have managed this feat by overcoming a number of obstacles:

Playing in PositionFive years ago the three owners, despite differing ages and personalities, all wanted success too much. By this I mean that they were all trying to do everything. They decided they wanted to change, and over a 3 month period gradually began allowing each other to play a defined role in the business. To begin with this was a painful process, but over the next two years small gains and increasing wins led to all three owners “playing in position”, deciding against returning to their old ways.The business responded. Revenues grew. Gross Margins grew. Quality increased. Most of all, the morale of their teams increased. Why? Because everyone knew what was expected of them as well as how to do it.. They started achieving their goals more often than not. They celebrated their wins, often with something simple like a shared gathering with food. In order to be effective, celebrations needn’t be elaborate or expensive.. Often simple gestures that are honest, clear, visible and consistent are enough.

At the same time as these three owners were leaning to play in position, they faced the first equal challenge:

Overcoming a Shortage of Cash, Getting the Confidence to Be Paid, and Attracting and Winning the Funding Desperately NeededFive years ago, this business was turning over $1 million per year. This has now more than tripled to $3.5m per year. To do this, the following was achieved:

​Overcoming the Fear of Losing CustomersThis business had $0.5 million in overdue debt. Because they were afraid of losing customers with overdue payments, they tolerated the burden of struggling to pay their people and their bills. But eventually they learned how to collect debt while retaining most of the customers who had previously produced it. They did have to let go of two customers who comprised 25% of their revenue, because these customers would not pay them for 6-12 months at a time. To their surprise, however, they were able to replace these customers within 3 months. By respectfully stating up-front their terms of business and sticking to them, as well as choosing customers who saw the value in what they produce, the business owners were able to cut their overdue debt from $500,000 down to $20,000, where it remains, even though revenue has more than tripled.

Engaging Resources to Create Financial Clarity, Forecasting the Business per Month for the Next Two Years, Presenting This to a Bank and Winning $250,000 in Additional Funding. I built this forecast for the business, delegated this to one of the business owners, introduced them to a 1st tier bank, and helped them explain to this bank their business values and value to customers.Recognising the value of this business, as well as the attitude, ability and commitment of its owners, the bank granted the funding. This funding was the lifeblood of this business for the next five years.

Many other challenges had to be overcome by this business in order to achieve the level of growth which it has. But its owners were only in a position to face these challenges once they had learned to play in position, gotten past their fear of losing customers and obtained bank funding. It has been my privilege to be able to help these business owners with their scaling journey over the past five years.Here are some of the improvements which the scaling journey has made to the lives of both the employees and owners of the business:​

Confidence, greater peace of mind, increased ability to think.

Improved mental and physical health.

Much more abundance, less scarcity.

Improved personal relationships.

Greatly improved market position, and the attraction of clients from competitors.